WATER MANAGEMENT INITIATIVE WMI MANAGING THE MERGER OF

WATER MANAGEMENT INITIATIVE (WMI) MANAGING THE MERGER OF MULTICITY UTILITIES Speaker: Naem Saleh, Utility Management Specialist, WMI March 2019 Arab Water Week 1

OUTLINE • Challenges of multi-city utility management • Yarmouk Water case overview • Centralization vs. Decentralization • WMI approach • Yarmouk Water customer service control unit • Success Requirements • Conclusion March 2019 Arab Water Week 2

CHALLENGES OF MULTI-CITY UTILITY MANAGEMENT March 2019 Arab Water Week 3

HUMAN RESOURCES CHALLENGES • Availability of enough highly skilled staff in each branch • Social and political considerations limiting distribution of skills • High cost of moving staff to remote branches March 2019 Arab Water Week 4

INTEGRITY CHALLENGES • Extreme decentralized authority is must • Risk of deviation in practices and procedures • Difficulty of monitoring micro indicators March 2019 Arab Water Week 5

EFFICIENCY CHALLENGES • Difficulty in identifying issues for the headquarters • High response time for issues reported • Low accountability of branches on transactional level March 2019 Arab Water Week 6

YARMOUK WATER COMPANY CASE OVERVIEW March 2019 Arab Water Week 7

KEY FIGURES • 29 thousand square kilometer service area • 330 thousand customers March 2019 • 10 branches in 4 governorates • 96 MCM of water supplied (2018) Arab Water Week 8

MAIN CHALLENGES • Shortage in water resources (68 liters per capita in 2018) • High energy bill (70% of OPEX) • Low cost recovery (2017 CRR is 61%) • Booming increase in population due to Syrian refugee crisis (660 thousand refugees in Yarmouk service area) March 2019 Arab Water Week 9

ORGANIZATION STRUCTURE FEATURES • Decentralized management of water, wastewater and customer service • Centralized management of financials, IT, HR and supply chain • Overlapped responsibility on some major functions between central departments and branch departments • No clear performance-accountability matrix March 2019 Arab Water Week 10

BILLING/COLLECTION EFFICIENCY – Q 3/2017 SNAPSHOT 140. 0% 122. 6% 120. 0% 110. 7% 107. 1% 100. 0% 80. 0% 94. 4% 107. 3% 99. 3% 72. 8% 73. 1% 81. 9% 75. 7% 73. 4% 63. 6% 60. 0% 106. 6% 89. 1% 72. 7% 70. 2% 60. 8% 107. 4% 89. 7% 85. 1% 83. 0% 70. 9% 104. 9% 103. 8% 63. 5% 70. 8% 67. 7% 54. 7% 42. 6% 40. 0% 33. 7% 20. 0% Irbid Jerash Ajloun Mafraq Collection Ratio March 2019 Ramtha Shouneh Billing Growth Arab Water Week Bani Obeid Bani Kenanah Koura Badia Receipts Ratio 11

BILLING/NRW – Q 3/2017 SNAPSHOT 96. 0% 80. 0% 94. 0% 70. 0% 92. 0% 60. 0% 90. 0% 50. 0% 88. 0% 40. 0% 86. 0% 30. 0% 84. 0% 20. 0% 82. 0% 10. 0% 80. 0% Irbid Jerash Ajloun Mafraq Ramtha Shouneh Bani Obeid Billing Percentage March 2019 Arab Water Week Bani Kenanah Koura Badia NRW 12

NETWORK BURSTS RESPONSE TIME – Q 3/2017 SNAPSHOT 90. 0 80. 0 70. 0 60. 0 50. 0 40. 0 30. 0 20. 0 10. 0 Irbid March 2019 Ramtha Bani Obeid Bani Kenanah Shouneh Koura Arab Water Week Mafraq Badia Jerash Ajloun 13

CENTRALIZATION VS. DECENTRALIZATION March 2019 Arab Water Week 14

CENTRALIZATION / MONITORING Monitored Controlled High Tech need Slow Centralized Decentralize d Inefficient March 2019 Humanized Passionate Efficient Arab Water Week High HR costs Independent 15

WMI APPROACH March 2019 Arab Water Week 16

HYBRID APPROACH Centralized March 2019 Efficiently Governed Humanized Passionate Monitored Controlled Arab Water Week Efficient Decentralize d Independent 17

HYBRID APPROACH Performance monitoring Automation Efficiently Governed Central Control Units March 2019 Policies and SOPs Arab Water Week

WHY CONTROL UNITS? • Standardize implementation of regulations among branches • Unification of work methodologies and parameters among branches • Strategize planning of activities and operations among branches. • Build solid monitoring and follow-up body in Head Quarters • Manage assets and resources for best efficiency March 2019 Arab Water Week 19

SUCCESS REQUIREMENTS March 2019 Arab Water Week 20

GOVERNANCE REQUIREMENTS • Top management buy-in and support • Clear organization structure and authority matrix • Mixing Decentralized operation with Centralized monitoring and planning • Well designed and reengineered policies and SOPs • Dynamic performance benchmark matrix, with clear accountability • Careful change management pre and post launch March 2019 Arab Water Week 21

INFRASTRUCTURE REQUIREMENTS • Minimum level of automation, securing real-time data and reports accurately • Good IT infrastructure, connecting control unit with branches • Clean database of assets and customers • Intensive training for control unit and branches staff March 2019 Arab Water Week 22

CUSTOMER SERVICE CONTROL UNIT IN YARMOUK WATER COMPANY March 2019 Arab Water Week 23

CONTROL UNIT FUNCTIONS Customer Service Director Customer Service Control Unit March 2019 Billing Metering Collection Objections New Connections Inspection Billing Supervisor Behavior Change Customer Information System Arab Water Week 24

CONTROL UNIT IN THE STRUCTURE Customer Service Director Customer Service Control Unit Customer Service branch March 2019 Customer Service branch Arab Water Week Customer Service branch 25

BILLING/COLLECTION EFFICIENCY – Q 4/2018 SNAPSHOT 140. 0% 120. 3% 120. 0% 120. 7% 119. 4% 105. 4% 100. 0% 92. 2% 86. 3% 81. 8% 80. 0% 104. 9% 103. 8% 85. 3% 89. 7% 85. 1% 87. 9% 83. 0% 79. 1% 73. 4% 71. 2% 63. 6% 60. 8% 106. 6% 89. 1% 70. 2% 65. 9% 107. 4% 72. 7% 63. 5% 67. 7% 70. 8% 60. 0% 48. 1% 42. 6% 40. 0% 20. 0% Irbid Jerash Ajloun Mafraq Collection Ratio March 2019 Ramtha Shouneh Billing Growth Arab Water Week Bani Obeid Bani Kenanah Koura Badia Receipts Ratio 26

BILLING/NRW – Q 4/2018 SNAPSHOT 120. 0% 100. 0% 99. 2% 99. 3% 99. 4% 98. 4% 97. 3% 97. 9% 97. 7% 95. 5% 97. 7% 95. 3% 80. 0% 67. 0% 57. 6% 60. 0% 46. 8% 45. 9% 38. 1% 40. 0% 32. 8% 31. 2% 32. 2% 24. 6% 19. 0% 20. 0% Irbid Jerash Ajloun Mafraq NRW March 2019 Ramtha Shouneh Bani Obeid Bani Kenanah Koura Badia Billing Percentage Arab Water Week 27

IMPLEMENTATION PLAN • Preparation phase (Sep-Dec 2017) – Top Management workshop – Office and equipment preparation – Training for control unit staff (140 training hours) – Reference manual production – Training for branches counterparts • Launching support phase (Jan-Jun 2018) – Resident full time supervisor – CIS-X 7 implementation and data cleaning – Hands-on training on report generation March 2019 Arab Water Week 28

CHALLENGES FACED • Preparation phase (Sep-Dec 2017) – Weak Management support – Shortage of suitable staff available to move to control unit – Old obsolete CIS-COBBOS system – Bad database of customers, full of data errors • Launching support phase (Jan-Jun 2018) – Resistance in branches and headquarters – Delays in CIS-X 7 implementation – Uncertain or missed historical data needed to build benchmarks and baselines – Absence of clear reporting lines in the organization structure March 2019 Arab Water Week 29

CONCLUSION March 2019 Arab Water Week 30

CONCLUSION • Balanced mixture of centralization and decentralization is the solution for multi-city utilities • Central control units is essential for efficient management • IT excellence enables efficient centralization and controlled decentralization • Stakeholders' buy-in and change management is vital for successful implementation March 2019 Arab Water Week 31

Thank You March 2019 Arab Water Week 32